Gathering the best information and updates from the online industry to deliver the most effective news and analysis on events and technology!

Message from Jean Touboul: With over a decade of hands on experience building e-commerce and online ventures from the ground up, and having been blessed to be part of amazing success stories with Disney, Warner, Commission Junction, EnContext (formerly ExecFocus.Net), I believe that I can share some insight that will benefit almost any Internet entrepreneur. The goal of this newsletter is to gather what I think are critical development and changes in the industry that will make a difference in our business. When appropriate I will also distil some of this news and add comments or my own perspective. I am also including a list of important events that I think may help shaping this industry, and that I believe deserve our attention. My ultimate goal is to find the best and most recent news on marketing and optimization, web design as well as technology that are changing our business and, in the spirit of what the Internet is all about, share it. To read my profile on LinkedIn click here

Bad Process Kills Good Analytics
(From ClickZ Article Article)
In many cases, organizations are still struggling to get the return on investment in their digital analytics that they were originally hoping for or could reasonably expect. Ten years on from when Web analytics started to go mainstream, why is that still the case? If we look at the possible reasons, they tend to lie in the “triumvirate” of technology, people, and processes… Click here to read the complete story

Video for ‘Net Success – Marketing & Measurement
(From Website Magazine)
The first two parts of our Small Business Lab on Web video provided insights into the research, planning, development and production processes involved in launching a successful online video campaign. In this, the third and final installment, we will address the different methods for marketing your videos and measuring their impact on the overall goals of your business… Click here to read the complete story

Search Marketing: The importance of an SEO Process
(From Marketing Sherpa)
I know those three buzz letters in the headline – S, E, and O – likely grabbed your attention and are the reason you’re reading this blog post. But I want to tell you why you should focus more on the last, and perhaps least buzzy, word in that headline – process. First of all, put a mirror up to your current search-engine optimization activities for just a moment and ask yourself… Click here to read the complete story

3 in 10 Consumers Make Mobile Purchases
(From Marketing Charts)
Three in 10 (29%) US consumers have made at least one purchase via mobile device, according to [pdf] a new white paper from Oracle and ATG. Data from “Mobile Trends: Consumer Views of Mobile Shopping and Mobile Service Providers” indicates this figure, recorded in December 2010, is 123% more than the 13% of consumers who had made a mobile purchase in November 2009… Click here to read the complete story

10 simple tips for Facebook and Twitter success
(From iMedia Connection)
There’s no denying the importance of social media. You get it. Your team gets it. The question is, do your customers care to get it, or are they tired of being asked to “like” everyone and everything they meet? The big problem nowadays, with endless tweets, friends, pages, profiles, and tags — is how to engage desired audiences in such a way that your brand is perceived as relevant… Click here to read the complete story

More Targeting and Optimization Capabilities from EnContext Advertising
EnContext Advertising is now offering much better targeting and analysis resulting from clicks on embedded links on videos. As before the system offer great flexibility for a viewer. Imagine watching a video that shows someone wearing a really cool pair of shoes. Point and click on the shoes and instantly a browser opens offering the opportunity to buy these shoes! Click here to read more and view the demo!

More Traffic and New Development Services from eFocus Marketing
Besides offering online marketing services including overall strategy, SEO and SEM, Affiliate management and other online services, eFocus Marketing (efocusmarketing.com) is now offering high volume of traffic at a much lower cost thanks to our relationship with high caliber networks. We are also providing php, .NET programming as well as MySQL management and optimization. Click here to visit the website and contact us!

New California Wine Venue and Lead Gen. Opportunities from My California Winery
Following the success of My California Winery (mycaliforniawinery.com), EnContext Media is launching Buy California Wine (buy-california-wine.com). The initial website inspires itself directly and greatly from My California Winery but it is set to become a vehicle for offering a greater line of California wines. As a result My California Winery will offer greater resources on the wineries of California. Click here to visit the website today!

eMail resources!
Do you know that you can have your own email solution in-house? If you are trying to reach less than 50,000 customers or clients on a weekly or monthly basis then you may want to investigate some of the solutions available out there. For example, I personally use Dada Mail, an email solution that is set-up on one of my server and I send 30-50,000 email monthly with relative ease. The system is HTML based and newsletters and ads are as easy as a copy and paste to set up and a click away from sending with automated opt-out and list management. Send me an email at jeantouboul(at)Encontextmedia.com or call me at 415-670-9397 if you are interested and I’ll connect you with Justin at Dada.

Google Introduces ProtoRPC!
Here on the App Engine team, we’re always looking for new ways to make it easier for developers to build applications and services. Today, I’m happy to introduce ProtoRPC, a new tool for creating simple Python services, which requires minimal set up and configuration to create new services… Click here to read the complete announcement

Six Must Know Oracle Commands!
(From DevShed)
Currently, only Oracle Database 10G Express – otherwise known as Oracle 10G XE – can be used freely by developers. If you do not have an Oracle installation on your computer, then you should install Oracle database 10G Express so that you can follow along and practice these commands… Click here to read the complete article

The 2011 Conference program will provide education and training to prospective participants in the regulated US and Canadian Internet gaming market. Attendees will acquire a road-map and the tools necessary to get from Point A (regulatory approval) to Point B (launch) with a firm handle on their capital, staffing, marketing and operational needs. To visit the conference website and register click here

Learn to maximize your presence on the internet with a variety of media. Through hands-on training using powerful yet practical tools, you will learn to drive traffic to your website, increase conversion rates, and strengthen your email campaigns. To visit the conference website and register click here

Whether you’re a content strategy convert or curious about where to start, there are plenty of sessions you won’t want to miss. You’ll walk away from Confab full of ideas and opportunities for both your company and your career. To visit the conference website and register click here

Attracting the biggest gathering of its type in Europe – over 12,000 business professionals – it’s the only place to be for ensuring your business is up-to-speed with all things digital. To visit the conference website and register click here

A well-managed affiliate program can play a key role in marketing strategies and can offer double-digit increases in sales. However, affiliate marketing, using one website to drive traffic to another, is frequently overlooked by advertisers because although the principles are straightforward putting them into practice can present challenges.

This course will outline the strategies, techniques and tricks to achieve an effective level of contribution and offer tips on refining your skills. To visit the website and register click here

I realized after completing Volume 1 that my introduction to Google AdWords did not have enough depth. After all, since Volume 1 is designed to help you prepare your business, I did not intend for users to create and launch full blown campaigns on AdWords. However, talking to people who have reviewed Volume 1, I realized that I underestimated the tendency in all of us to want results as soon as possible. As a result, readers who tried this approach started expanding their budgets and running actual campaigns. As a result, I have received comments and questions on Google AdWords campaigns that beg for the following additions.

Keyword Search

How can you find out the top bid for any given keyword? Google provides advertisers with a great option to search for keywords, and, as explained above to see the number of competing sites and bidders. However the Google bar system does not indicate the top price for keywords. That being said, there are ways to find out how much your competitors are paying thanks to a small aberration in Google Keyword search interface.

Here how it works: go to the “keyword tool” and input one of your keywords. The keyword tool should return a number of rows listing at first the keyword that you selected, and then a column containing the “competition bar,” “local search volume,” “global search volume” and the “add” button. By simply highlighting and copying the line corresponding to this keyword you will be able to see the top bid for that keyword as shown below.

As shown in the example, simply highlight and copy the entire row that contains your keyword and paste on your “notepad” as shown below.

You will note that something new will appear following the keyword name. Typically, something like one and three, followed by a price such as $6.32, as shown in this example, and then followed by the number of searches, or the words “not enough data.”

What you are looking at is the top payout for the top position (one and three) on Google for that particular keyword. In this instance it is $6.32.

How can this help you? It will give you an idea right from the beginning of how much people are willing to pay for the keyword(s) in which you are interested.

Tip: Something that is important to realize with keywords is that while you may be using 500 keywords in your campaign, only a handful will get most of the traffic, since they are the ones that most people have the tendency to use when searching for your product or service.

After experimenting with keywords for a week or so, you should already have a good picture of which keywords are generating traffic and exposure to your ads and which are marginal. Needless to say, your focus should be on the top 20 or 30 keywords (or 100, if you are lucky to have that many generating significant traffic).

Keyword Options

Google AdWords, like many of the other search engines and ad networks, offers the option to target your keywords, according to search behavior.

Options that Google gives are as follows:

Exact match (keyword is contained in brackets like this: [keyword])

Phrase match (keyword is contained in quotes like this: “keyword”)

Broad match (keyword is not contained in anything like this: keyword)

Negative keyword (keyword is preceded by a minus sign like this: -keyword)

By now, you should know how Google defines these keywords, but if you don’t know look at this page:

What does that do for you? It all depends on your service or product. For example, taking something like “coupons,” if you offer any and every coupon under the sun you may want to go broad. However, if you are offering “printable coupons,” you may want to limit the generic term “coupons” to an exact search.

On the other hand, does it matter if your ad is very specific? Or would it make sense to have a generic ad and have very specific keywords that are set as exact matches? Confused? No worries…

What all this means is that you have to experiment and set goals and see how your campaigns, ad groups and ads perform. This is not something that is done overnight, but if you give it time and if you are disciplined about it you will get better performance and, eventually, great results. And remember that what you learn on Google AdWords will be transferable (to a large extent) to Microsoft Bing, Yahoo!, MIVA, Admob, 7Search, etc. So, it is worth the time and effort.

Geographic Targeting

Targeting may or may not be a critical issue for you. For example, are you targeting the world or the U.S., or certain part of the country? As a matter of fact, are you targeting audiences in specific areas of the country such as part of New York or California, and so on. If this is the case, narrow your targeting as much as you can or create buckets based on your targeting as well.

Don’t be afraid to overdo it, since you will be able to go back and change the parameters of your targeting.

No matter what, make sure that you set this to match your business strategy and its limitations, if any,. Otherwise, you will be wasting valuable dollars on traffic and clicks that you cannot service.

Demographics Targeting

Google allows you to target specific languages. Take advantage of it if you are targeting specific geographical areas, such as the U.S. For example, if you are offering coupons from electronic retailers that are targeting Latin speakers, then you should certainly select “Spanish” as a language targeted.

You have an opportunity to show your ads to Spanish speakers searching Google. And since Google looks at the IP address of the user to define where this person is located, then ads for a Latin music store in L.A., for example, that target Spanish speakers will be shown when Google detects someone coming from Puerto Rico or has selected Spanish as its primary language.

Networks and Devices

AdWords gives its customers the ability to select how ads will be shown. Options include everything that is included in the Google arsenal and gives the opportunity to select where you want to show your ads.

You can select “Google Search” and if you select that option, then you opt for Google Search’s partners, such as DMOZ, and all search engines that use DMOZ for indexing Web sites. Google Search is the bread and butter of Google and as such is the most expensive way to display your ads. Based on my experience, selecting Search Partners does not really affect the overall result and this is something that I always select.

You can select content and within content, you have the option to select the entire content network that Google uses or you can handpick your own content network. The content network can produce huge amounts of impressions, but the number of click-though and conversion is not that great. I usually set my bid at about 50-65 percent lower than my search bid – For example, if I set my default bids for search at $0.50, I would set the default bid for content at $0.25-0.30, and sometimes lower.

Alternatively, if I opt for placements that I select myself, I often will set my bid higher than the search default. As an example if my search bid is for $0.50, I would set the bid for selected placements at $0.65-$0.75, and sometimes higher.

In this same area of AdWords, Google gives you the opportunity to select the type of devices where your ads will be delivered. The options are computers and/or iPhones.

Obviously, if you do not have a Web site or lead generation form that allows access via mobile devices, it is pointless to select that option.

Bidding and Budget

This is by far the most critical area for an advertiser, since it can be very tempting to set your budget too high or too low and spend too much too fast or not enough and be marginalized by the Google optimizer.

You also may be tempted to select the automated bid or, when you’ve been “live” for a while, switch to CPA (when it is offered as an option), thinking that you will get a better ROI and more safety on how you spend your money. (After all, CPA stands for cost per action.) Unfortunately, there are no easy solutions or any simple answers and CPA with Google AdWords does not mean this (If you want to run a CPA campaign, check out CJ or other CPA networks. These are much better options.)

My suggestion is to start with a low budget and lower-end bids. If you’ve done your homework and looked at the keyword tools and followed the instructions I gave you in the preceding section, you should have an idea of how much the top advertisers are paying for the top keywords.

Once you’ve done this, put your thinking cap on and decide how much you can afford to spend. Keep in mind that on a good day, as much as 10-20 percent of the clicks you pay for will not even see your page (this will be explored in Volume 2). Of the 80-90 percent remaining, only a fraction will convert into anything and you should be conservative and assume that if you are selling or offering something with a great price, supported by a seamless shopping cart and inexpensive and speedy delivery, you will be happy to convert a 5 percent to 15 percent of click through. In other words, for 100 clicks that you will pay Google for, you’ll average four to 12 conversions. Do the math and make sure that you know how much you can afford to pay in order to make a profit. On the other hand, if you look at it from the perspective of the cost for acquiring a customer, then you may want to look at the value of your customer over time and budget accordingly.

Also keep in mind that 60-80 percent of your keywords will be set at a relatively low bid amount, since they will only generate minimum traffic in your vertical and people will not bid high for those. As a result, set your default bid at the low end of your bidding price.

If in doubt, set the default to $0.35 for example. Once you have uploaded your keywords, AdWords will automatically show you which keywords bids are good and which ones are below what they call “below first page bid” and will even give you a price that you must pay to get on page one.

Once this is available, you will be able to adjust as needed. But please be very careful how much you bid and don’t make the mistake of believing that all your keywords should be on page one. Take the time to see how things develop with impressions before you adjust. Also know that the page one bid is an average and varies from hour to hour.

As far as budget, set a budget that is as low as you can get it based on keyword costs and see how things perform. You always will have the opportunity to go back and change your daily budget.

Ad Delivery Type

AdWords give you two settings that allow you to show ads in any position or to have them automatically managed for maximum exposure. I never liked the automated options on Google (or any other ad network for that matter – remember that they are created to make money for themselves, not you). As a result I always set this to “show ads in any position”

Another option in this area is delivery method that you can select as “evenly” or “as quickly as possible.” Frankly, you will have to experiment with this functionality to see which one performs best for you. I always leave this setting to “evenly” since I manage the time of delivery for my ads.

Time Delivery

This is what Google calls “advance settings,” as if the start and end date is an advance feature. Typically, you don’t have to worry about the end date since you can “pause” a campaign or an ad group at any time.

The next option that is available is to decide what day and time you want your ads to appear. I recommend that you set this to when you believe those people who are looking for what you have to offer are searching and, of course, based on your location (EST, CST, PST, GMT, etc). This takes some common sense and experimenting.

The final two settings are for ad rotation and capping, and I personally recommend having ads served evenly and not set a cap on impressions (at least when you launch a campaign).

Campaigns, Ad Groups

There are many ways to set campaigns, ad groups and ads and I recommend that you start with a simple plan, and when you have time to experiment to go to more complex settings. For example I’ve experimented with specialized ad groups and got some interesting results. I’ve created ad groups and ads using the exact same keywords and setting each group to use all the keywords with variation as far a keyword options (exact, phrase, broad).

For example, I had some successes with ad groups that specialized in the way keywords were handled (exact, phrase or broad).

Here’s how it worked: I created a first ad group that had keywords set to “exact.” I then created another ad group with the same keywords, but this time these keywords were set to “broad.” Finally, I created a third ad group with, once more, the same keywords. But this time, all keywords in this ad group were set to “phrase match.” Set your bids at different levels with the lowest for the “broad” and the highest for “exact.” Ads should be somewhat different, since it may be possible for two of your ads to be displayed on the same page, each being associated with one of these specialized ad groups.

Another approach that I’ve seen, and with which I experimented with some degree of success, especially when trying to control cost, is to set “search” campaigns” vs. “content campaigns”.

In this instance I would create the exact same campaign but one would be set for search exclusively and the other targeted at content sites on the Google network. For the “content campaign” I would create ad group corresponding to “buckets” of content theme following AdWords own themes as shown below.

This approach takes quite a bit of work, but once it is set, it runs by itself and I find the rewards to be quite good and worth the time.

Tip: Using the desktop “AdWords Editor” makes creating additional content campaigns quite easy for most anyone and this is something that is covered in more details and during “live” sessions in Volume 2/Workbook.

Tracking

Google provides advertisers with the possibility of tracking conversions on their sites and be able to not only see how many clicks and conversions occurred but, more importantly, to see how many landing page conversions turned into some kind of action on a second, third page or fourth page all the way to the “thank you” page.

Analytics as basic as what Google offers are indispensible tools for an advertiser, and you must integrate it into all your pages and campaigns. The task of creating and copying the code onto pages of Web sites may be daunting to some, but this is an absolute must and something that is easy to do. However, for those of you who are afraid of touching your page’s code, we will cover this in live sessions in Volume 2. Regardless, there is also no need to be intimidated by this task, since including this code is a matter of copy and paste and Google instructions are simple and to the point.

Tracking is now available on pretty much all ad networks and they will allow you to evaluate your success or lack of it. As a result, no matter which network you use, utilize the available tracking code.

To better track some of my campaigns, I also create different landing pages, something that allows me to track specific ads or campaigns with more precision and better evaluate networks. These pages are identical (unless there are reasons to change the look and feel – targeted at men vs. women for example) and are only differentiated by their name. For example:

A/B testing is by far the best way to improve the performance of your ads and of your overall campaign. This is an exercise that should never stop since things are never static on the Net and adjustments are constantly needed to adapt to new trends or changes.

A/B testing is, for all intent and purposes, the ability to pin two ads against each other and, by a process of elimination, come up with the best one (or group of ads).

What kind of ads should you run? Google, like most anyone else, gives you the opportunity to create text ads, banner ads, offer coupons options, etc. The answer is simple: try them all. However, critical to your success is the cleverness of your ads and copy. You must either have the time and talent to write some solid ads and create appealing banners or you must find someone who do that. When I say find someone, I do not mean outsource to the cheapest banner designer that you can find. Rather, I mean find someone with whom you can work and who understands what you are shooting for and who can deliver solid and witty copy. In the same manner, find someone else who can create original creatives that take full advantage of the copy.

Finally, don’t assume anything when you create an ad. Research your audience by going to social networks and see what people are talking about and how they talk to each other. If this is your audience, you want to make sure that you speak their language and talk about something they care about.

Final Observations

Google is not in the business of delivering a service to please you or me, but rather to please its CFO, CEO, president, chairman, and, ultimately, its investors and stock holders. In short, Google is not here to help you make money, but to make the most money at your expense and at the expense of the other advertisers using the network.

As a result, no matter what you do to outsmart your competitors, Google will outsmart you and everyone else who is advertising on its platform since this is GOOGLE’s platform.

In short, no matter how smart you think you are, Google, and the other ad networks where you are thinking of advertising will outsmart you. They are in charge and you are playing by their rules and on their own turf. People are not using AdWords because this is the best way to expose products or services. People choose Google AdWords because of necessity.

This is something that you have to recognize going into this game and the sooner you understand the dynamic the better.

The complete manuscript of Plan your Internet Success is available at www.jtouboul.com

I was planning to make a short stop here and combine advertising and banner exchange, but these are two very different topics that need to be treated in very different ways. Furthermore, I believe that the topic of Web advertising on the Net is very often brushed aside as too expensive or at the other end of the spectrum, “over-sold” by gurus as an easy way to make money doing what is called “arbitrage.”

As a result, instead of doing a short overview, I’ve decided to spend some time reviewing advertising on the Net. The focus is on Search Engine Marketing (SEM) and Cost Per Click (CPC) advertising typical of search engines as is AdWords. As a matter of fact, I will use AdWords in particular, as well as keyword advertisement (I will address keyword advertisement on Facebook and the other social network in another issue) to review this topic, since it is a popular way to advertise today. This fact is a result of various changes on the Internet including:

– Searches are a fact of life and most (if not all) people search for something using one or several search engines

– Sponsored listings that are presented to users at the result of a search are common practice and quite successful.

– Advertising on the Net, and on search engines in particular, has become a necessity for Web site entrepreneurs, if they want to offer their products or services to potential buyers at the most opportune moment.

– Keyword-based advertising can be a blessing in disguise if you know how to use it and how to manage your spending and advertising methods.

– Google AdWords and the tools that are offered via this application are great for collecting tons of intelligence and using it to better understand your potential customer and what it will take to get their attention.

– Google AdWords and most SEM solutions suck for affiliates who work with networks such as Clickbank, CJ, Linkshare, etc., and make a commission based on sales — unless you know how to cherry pick offers and manage traffic generated by clicks.

– PPC advertising can work if you have the right formula of service or product and play the game smartly.

First, let’s set the scene for search today: You may not like it but Google, Yahoo! and MSN provide most of the searches on the Internet, with Google being the dominant figure (nothing new here).

Here are the official numbers per Nielsen for searches in 2009.

Google: 64.0%
Yahoo!: 16.3%
MSN: 9.9%

If my math is correct, this represents more than over 90 percent of all searches on the Net.

If you are an information junkie and want to know how the other 10 percent is split, here it is.

This demonstrates one thing to me (and, I hope, to you as well), Google is the dominant search engine.

This also implies that Google is most representative of most every users and searches, and, as a result, is very accurate as far as what users search for and how they search. As a result, Google can provide you with the best intelligence on your potential customers’ search habits.

Of course, you can now open an AdWords account and start spending your hard earned money on very expensive keywords and key terms and probably not generate enough revenues to pay for it, let alone make a profit.

So, how does one use Google to gather information without spending a fortune?

Based on most online marketing doctrines, a pay per click (PPC – also called Cost per Click – CPC) advertising campaign has two very distinctive goals that include:

1) To ensure that an ad (text typically, but also banner ads in the network) is positioned on the search engines to attract potential customers and trigger an action and/or increase sales

2) Expose a company brand on the Internet and/or use name recognition to appeal to shoppers who have the tendency to trust and shop at name-brand online stores (a network like Google Content Partners or Networks like Commission Junction, Linkshare, etc. are a good examples of those).

For the sake of keeping this plan simple at this level, we will look at what is probably the most impressive ad network of them all: Google AdWords.

The first rule of understanding AdWords is that no matter what you think, you must realize that Google Ad Network (the bid system where people bid for keywords on a CPC or CPA basis or partner contents) is designed to make as much money as possible for one entity: Google. By playing you against your competitors, AdWords’ bottom line is its own profit margin based on clients’ size, reputation, history, spending, etc. Hence, the basic principal of AdWords, where people believe that the more you pay, the better your position, is not always correct.

And while the AdWords worked relatively well for most everyone at some point in time, it no longer works when keyword bids are as much as $9, $15 or even a whopping $30 per click. FYI, just a few years ago, the average keyword on Google was $0.54.

This reality should tell any marketer to re-evaluate the way he/she uses Google AdWords (and the other SEM solutions for that matter). My advice is, first and foremost, advertising on the Net using SEM should be used to:

1) Initially gather information on what/how information is being searched and the cost of keywords, hence a campaign.

2) To give you the opportunity to analyze this information to find the best way to “monetize” your services or products based on what others in your vertical are spending.

As far as branding, I am of the opinion that when it comes to PPC, branding is nothing more than a “residual” effect, and brand recognition will be minimally enhance if at all. However, you may have an advantage if you already have an established name. If your plan is to brand, then look into networks like CJ or other CPA networks or something like AdWords content sites and make sure that you have banners and creatives that give your product and company justice.

So the question is “How to Use AdWords?” to get maximum bang for your buck?”

At this juncture, your goal should be to use AdWords to gather information with minimal expenditures.

The first thing you need to do is to create a campaign for each product and/or service (and business if you are launching multiple) that you have and then create buckets of key terms using keyword software.

I personally recommend using a combination of two or three solutions to search for the best keywords and they include:

Third: Use a software or solution that provides you with a KEI ranking for keywords. KEI stands for “Keyword Efficiency Index” and uses a simple formula that attributes a value to a keyword, based on its popularity and competing Web sites that feature this keyword.

As a result, very popular keywords often will have a low KEI rating since the competition for these keywords is fierce, hence not so good, since bidding on these keywords is probably very high. The goal in looking at KEI is to identify keywords and key terms that are searched, but for which the competition is not so fierce and, as a result bid price is low.

I personally use IBP, an all-in-one software that allows me to test HTML, find keywords, calculate KEI, submit sites, evaluate a Web site’s ranking, and much more. If you are interested, check it out at http://www.ibusinesspromoter.com/

To illustrate the three steps that I explain above, I created screen shots that show the steps that I would follow using first Wordtracker, then AdWords keyword tool and finally IBP.

Looking for keywords related to a theme such as “marketing” and marketing as it relates to the Internet in particular, I first use Wordtracker to find keyword in these themes as shown on screen shot 1:

The result that I get already is giving me a lot of potentially good keywords and key terms. However, since “marketing” is a high level keyword (after all what kind of marketing are we talking about), the keywords that are listed in the result become what I call a “bucket.” The idea of a bucket is to group together keywords that address specific area of the business you are targeting.

Now, by clicking on these keywords, I am able to drill down and find keywords that are specifically related to each bucket.

For example, clicking on “Internet Marketing” would result in the following:

This result is my first bucket of keywords that I titled “Internet Marketing” based on the keyword that I selected to explore one level up (as shown on screen shot 1).

The same approach is taken with the other high level keywords that were obtained at the first level of search (screen shot 1: “Search Engine Marketing,” “Network Marketing,” “Web site marketing,” etc.)

However, what I suggest is to organize keywords in some kind of buckets system. Buckets are, for all intents and purposes, a way to better define your vertical by specialized keywords and key terms.

The top level one is “Marketing,” but it is a very big topic so I need to better define what I call specialized-verticals like “Internet Marketing,” “Search Engine Marketing,” etc. All of them derive from my main vertical, but allow me to be more specific in the type of marketing I am going to target.

The importance of these buckets is that eventually they will become your ad group on AdWords, and that alone will allow you to be much more efficient in the way you use AdWords.

Using my example, when I’m finished with this exercise I will have a top level vertical called “Advertising” that will translate into my campaign on AdWords and buckets like “Internet Marketing” that will become my ad group on AdWords. As a result, my AdWords account will look something like this:

Now, you may think that you are ready to roll, but before you spend a dime, there are two things that you must do (as explained in the preceding pages). You must check the AdWords Keywords tool and evaluate the KEI of each keyword.

The AdWords keyword tool is quite simple and allows you to find keywords in the same vertical that you entered as shown in the screen shot below.

As you can see AdWords gives you a number of options for keywords that you may or may not have already found on WordTracker, and there is nothing wrong in adding new ones to your list of keywords.

However, stay in the spirit of your bucket, and don’t add keywords that are not directly related to that bucket. Since, in this example, I am set to find “Internet marketing” related keywords only, I would stay away from keywords that are not directly related such as “market research” (listed in that same result under “Additional Keywords to Consider”). In this case, assuming that “market research” is a keyword that I could use, I would put it in a different bucket or create a new bucket.

A good example of that are the key terms “search engine optimization” and “SEO.” These two terms stand for the exact same thing, but if you pay attention, you will note that people search using the term SEO (or SEO associated with another word) as well as search engine optimization. And even though SEO stands for search engine optimization, there are enough searches under these two terms to make space for a bucket dedicated to each one. As a result, in this instance, I would create an ad group called “SEO”, along with one called “search engine optimization”.

Finally, while you must pay attention to the bar that indicates the competitiveness of these keywords; do not be alarmed since our next and last step will be to review the popularity and KEI of these keywords, something that will define how we bid.

Tip: The blue bar that you see on AdWords can be a very useful item that can help you find out how much the price of the top bid is for any given keyword at a given moment. This is something that is explained later on in this document, so keep on reading.

As mentioned previously, the KEI is something that can be obtained using various online solutions or software. For the sake of this example, I will show you how it works using the IBP software (next page).

IBP, or similar software, can provide you with the ability to confirm from an independent source (other than Google) the number of searches for a keyword as well as the number of competing offers relatives to this keyword and, finally, a KEI value. The KEI is nothing more than a simple formula that reads as follows:

With SV = Search Volume and C = Competition

Using this formula, you can calculate the KEI of each keyword yourself as per the example below (using Wordtracker and Google Search – simply enter the keyword on the search box and look at the number of result you get):

A more advanced formula is also used for calculating the KEI, and that formula uses the relevance of a keyword. The formula reads as follows

With SV and C based on the same values and with R = relevance

Relevance is something that is defined by the user and typically has three to four variants, as follows:

1 = Excellent Relevancy

2 = Good Relevancy

3 = Limited Relevancy

4 = Poor Relevancy*

* Note that in this case the KEI = 0 – some formula have only three relevancy values, but I find “poor” to be almost irrelevant keywords

As a result, your own calculation using the same example of keyword (Internet marketing) will look like the following:

Note that the KEI and KEIr are identical in this case, because the keyword selected (“Internet marketing”) is very relevant. However, the KEIr will start moving down as relevancy changes as shown in the example below since in this example “Dallas Internet marketing” has limited relevancy and, as a result its value is only 3:

KEI Results for Keywords

Note, however, that I decided in this example to give a relevancy value of three to “Dallas Internet marketing.” Of course this would not be true if I were targeting the Dallas market. Should this be the case, my relevancy value for Dallas would be 1 or 2 depending on the importance of this key term in my campaign.

This leads me to point out to the importance of keyword relevancy and the fact that keywords’ relevance is a judgment call based on your campaign’s goals.

Go get it

You are now ready to start with AdWords, and the first thing you will need to do is to create a campaign budget and set the type of campaign you want to run (search or content) and other targeting factors. Here are some recommendations:

– Set a low daily budget with limited time for the campaign to run (you can always extend it) and time during the day when you want it to run. Again, remember that the goal of this initial campaign is to gather intelligence on keyword popularity and pricing, competition, etc. This should be viewed as an R&D project.

– Create your first ad group and set a cost per click at $0.35 for search content. Again, nothing to worry about you can always change it.

– Create one or more ads for each group (I suggest two to three per group) using your main keyword in the header (for example “Internet marketing expert” for the ads corresponding to the Internet marketing group). Look at other Web advertisers who offer the same service as you by searching Google. No matter what, do not copy what is done. Create your own ad, something that reflects who you are.

– Some people may recommend that you create ad groups that target search, network content and managed content. I personally like to segregate between search and managed content and create two sets of campaigns. However, this is applicable when I am actively generating clicks and leads. For the sake of this “exercise,” I suggest that you focus on search and opt for “network content” with a very low PPC for the latter: set it at $0.15, or less, just to get is going and see what you get. As far as managed content, feel free to start if you think you can manage it all.

An example: for an online campaign that I run on AdWords I have for one campaign, 22 ad groups, 63 ads and 480 keywords. It’s a lot of work, but it is worth it if you want to make money on search engine marketing and Google AdWords in particular.

Once you have launched your campaign, you will very quickly see something happening, and that is the infamous “below first page bid” on some of your keywords. Nothing to worry about since the goal here is to find out how much it costs to be on the first page (but not in order to be there).

Tip: Don’t be intimidated by high keyword prices to be on page one. For example, some keywords in the Internet marketing space go for as much as $20 per click for something like “email marketing software” (I guess email marketing software companies have a very high margin or a high lifetime value for their customers). Regardless, the top position on AdWords is not something you want to target, so no worries.

Tip: To better manage your campaign(s), I suggest that you download a Google campaign management tool called “AdWords Editor.” It comes with great features and allows you to manipulate things much faster than if you were online. (http://www.google.com/intl/en/adwordseditor/index.html)

Now, the game begins. Using your KEI software or own calculation look at your keywords with the highest KEI. Those are the keywords that may not generate great traffic, but that are the most cost effective in getting visitors. I usually increase my bids for those to be in a decent position. Not necessarily page one, but close enough, and as long as it is within my daily budget.

During an actual campaign, one of the most critical aspects of AdWords is its “network placement” and “managed placement.” I continually adjust my “managed placement” and often pay as much as my PPC average for search, but set my network placement maximum to a very low number. I also slash out Web sites from my managed placement that are generating clicks, but not producing conversion.

As you do the above, you will notice within a relatively short period of time that some buckets/groups show significant impressions and some don’t. This may be the result of a bid that is too low or the keywords simply do not create much traffic and this is part of the game.

If would increase your PPC for search, remember to change in small increments.

In the same manner, if you change your PPC for a specific keyword, do not be tempted to double or triple how much you are willing to pay. Do it in increments and do it often.

Within a couple of weeks of this (I usually do this for three weeks and spend one to two hours per day reviewing and adjusting), you will see an emerging “picture” of what is going on in your space including “hot” keywords based on searches, ads that perform well, keywords and messages that combine to convert well, etc. Your spending for these two or three weeks may be $200-$300, but the intelligence that you will gather is worth 10 to 20 times that amount.

Why? Because you now have a great “picture” of what works for your campaign as far as keywords and ads. Equipped with this information you will be able to create campaigns on Yahoo!, MSN, Miva, AOL, Ask and all the other search engines, while minimizing your time tweaking your campaigns. Sure, there may be some different results for the same keyword on Google and AOL, but is it worth spending an entire day figuring this out? I’ve always believed and continue to believe that when it’s all said and done, Internet marketing is a numbers game and that once you find what works on Google, it probably will work 90 percent of the time on Yahoo! or MSN. This approach will allow you to minimize the time spent managing campaigns, while expanding very rapidly.

With this information, you also will be able to better target directories if you want to advertise on them. You will be able to better target your email campaign thanks to a better understanding of what works in your message and the key terms to which people are more receptive. And this applies to both the subject line and your email message.

While all this is time consuming, it is by far one of the most critical parts of your plan to succeed, so stay focused and do it right.

Coming up on Friday is the complement to this post with more details on Adwords

You can review the complete manuscript, “Plan Your Internet Success” on my web site at www.jtouboul.com